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India has become the fourth largest market in terms of total market capitalization. Currently, the India’s capital market capitalization stands at $5.5 trillion, higher than Hong Kong, UK, France, Canada, Saudi Arabia and Taiwan.
US tops the list with market cap of $58.4 trillion. China and Japan follow US with market cap of $8.2 trillion and $6.7 trillion, respectively.
Here is a list of countries and their market capitalization:
|
Country |
Market cap (USD trillion) |
|
United States |
58.4 |
|
China |
8.2 |
|
Japan |
6.7 |
|
India |
5.5 |
|
Hong Kong |
5.0 |
|
United Kingdom |
3.3 |
|
France |
3.2 |
|
Canada |
3.1 |
|
Saudi Arabia |
2.7 |
|
Taiwan |
2.4 |
Source: Bloomberg data as on August 26,2024
Cafemutual spoke to industry experts to understand what factors make India a good investment destination, what will propel its growth and what are the roadblocks to this.
Anupam Tiwari, Head - Equity, Groww Mutual Fund believes that India’s demography will help propel its growth in the coming years. He said, “Japan’s aging population and China’s structural governance issues will work in India’s favour. But we will also have to focus on per capita income growth and fiscal deficit of government movement to ensure markets do well.”
Dhimant Shah, Senior Fund Manager, Equity, ITI Mutual Fund credits financialization of assets to be one of the reasons for growth. He also feels a credible growth story of India with sectors like pharma and software making a name globally to be one of main reasons leading to a high market capitalization. He said, “To continue this growth, India has to sustain its reforms and policies for regular flow of FDI. We would also have to focus on creating sustainable employment possibilities to increase GDP.”
Rahul Singh, CIO, Tata MF is hopeful of the long-term potential of investment and consumption cycle, which will help the India’s economy to grow. He said, “Growing middle class, increased government capex, increased real estate demand has been instrumental in pushing India’s GDP and market capitalization which is expected to grow in the coming years.”
Santosh Kumar Singh, Fund Manager, Motilal Oswal MF is of the opinion that India will surpass Japan in the coming two years. He said, “India’s major growth will come from banking and financial sector, IT and manufacturing sectors. Coming to China, the fact that globally there is a hesitation to invest in China due to its government policies will only work in India’s favour.”
